"Some of our catalog artists earn more from streams than downloads of individual tracks [or] any other format," he said, according to The Telegraph.

"If we didn't have digital we wouldn't have a business. Physical is still important to us but the lesson we learned over last few years is that you have to strike a balance between giving people what they want on the one hand and actually being a business."

Spotify paid $180 million (£115 million) in royalties to musicians last year, a figure that is expected to rise to $360 million (£230 million) in 2012.

The service has 15 million users, 4 million of which pay a subscription fee to listen to unlimited music without adverts.

Kenneth Parks, chief content officer at Spotify, told the British Business conference: "There are a few myths around Spotify and if I want to debunk one of them it is that we don't pay back to artists. We just passed the 4 million paying user mark, a great number of those were stealing music."

Mills's went on to describe Adele's success as a "miracle", attributing it to her music's personal connection with audiences worldwide rather than the current structure of the music industry.